Case Information
*1 OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
Gil dL Gas Divirlon
Rrllrord Comlrrloa of Taxar
Austin, Tama
f 31, 19@, in at facta, and 934, th8 Railrowl la f7 prrait or- r drill 8od op- Todd-stinohoomb County, Tora8, ea maw
wea riid by Stanolind Oil and Mr~nolia Fatroloum at IEdgar and thr OOS&~OA validity o r l uoh pen&t or- District Court upon final hsar- f$$,~$&r& raid parad order ta be un-
rraboaabl~ and InvalId and rnjoindl pro-
duction fret mid Wall HO. 3. UpOn appO111~ tha Dirtrlot Court Ju&mrnt ma afiirmd br
the court of clril App6ale. (mger t*.
~.tsnollnd Oil k Gacr Oompny, et al, 90
s. w. (26) 636). The appallate 0plr110n
reolted that:
_ L, ., ” .- 812 Hmora bla John 8. Taylor, 98~8
“1. Th4 Comn~osIori CIQ Mt hdlV8 jurla- 6i0tion to isrlis such RUl8 37 permit ort!ari
"2. Tbr ?Xper f~+s88 in o_uertion oon- 8tItutod e ~voluntary rubdivlaion in viola- tion ef Fuls 37';
"3. Es Zdgor leaca alraedy had reaaoa- able devalopmrnt anb an equal opportunity
o4th that OC adjoining lsrsrrholdsr8 to rooowr
tha 011 beneath 8ach tract.
%A S~ptambrr. 11, 1936, 8fter now appli- oation, proper notio88, sti h88rlngo, the Con- mir8ion again grantrd ldear a Rulr 37 permit
ordrr authorizing production oi rpoh wrll Ho. 3, the wall havim pr8vlounly been drilled under authority of the p-it order &ted Septomb8r 2&, 1934. An urlpinal $roo88dIng MI fileb
by Stanoltid and Ya&nolIa In #he Court.of Civil Appesla #asking write vi pr,roblbltion, injuno- tion, and othrr mllaf to rsrrtraln EQrr ?rom said well end to prohibit thr Gomir- opersting 8Ian from mrsltting produotlon OS 8aid wall and frm i88uiag t8adarr for ray all pro- euorb the refrun. The a0m or Civil Apprle
dsnlsa thla ralief (stanolin& VI. 'xtl&ar, 98 S. &. (20) 222) upon tbr ground tit an l cl8cpmt8 la&al raaad,y 8rIat8d; but t!i* Court 8nnouno.d.
theta
"1. mob ita prior jud8mclt ad- baas fudging tha inval.ldity of thr Baptrn- bar 21, 193L, permit order worst ffao- tIv8 arid controlllas of the lwat per- mit trlsr;
"2. The Comalabion*a ordrr and eef t888ra i8s\ud th8rrunder ar8 toId, being In viola t Iaa or fbe juQa*at Of rush Court in OQUIO No. 8292, @onmqrntly any further rrstrcrining OT prohIbItory ordrra vwld ba aUp@r8rtW+tOry.
Honorabl8 John 8, Taylor, page 3
wEdgar arQll*d to the suprrs8 Court for a writ of srror, but Suprena Court eeni#d the applio~tlon for lack of jurlrcliofilon cm January 6, 1937. Edgarr's raatlon for rshesrlng
w.8 OV#rrUl#d by the SU~r*n# Court. Rdp,ar wae th8rrupon oOmp8~18d to c1088 in his well and plPdUOti,71L th#r#fWX. O8668
“~4~?&il#, StenolInd 8Id ~&lOli. b#Bd filed an original proQ88din&,in th8 Court o?
citil App~al8 t0 #IIfO~# th8 $Idg#6UAt# Or that Court in eeusee No. 8292 (90 s. t?. (26) 656) and No. 8580 (98 8. IF. (26) 222), 8nd t0 $X-O- hlbit enjoin Edgar trm produolng oil
fl?cP 86i't HI11 NO. 3, t0 $lU~ it, 65d t0 bold Mdgar In contempt 0r courtfir riolating l uah Ths Court of Civil Appssls d#Bi#(L jUdgIll8Ilt6. all of the raiief #ought by relatorr. (St8nolInd te. Edgar, 5. K. (24zd) 631.1 Edgar tlwn
a@iB 6omaenord Op#IWtiOB Of SSid W811 Utnd8C authority Of ?ih# &3RE&i@iMl's Q#mit Order dated Srpteabar 11, 1936.
*Th#r8aft8r, stano1lBd @ml M8unolia ii184 silt Weti#t &i&Or #IL4 the Crarni##IOn ill th8 Dletrfot COUrt of Tr8?i8 &U~iity, Ott@Okilrg 8814 order of SeptWiIbor 11, 19%. On I;hy 27, 1939, final jUd#l#IIt by Dietrid was rendemd court 8U#tainIU& an4 upholdlipg th8 r8lld:tf or
said ardor, the Court In lt8 judgment 1ik*wl** fiajudgine, that *all part an6 fusurr Qrodoetlon Of Oil from SOid WSll 18 ill dL1 l'#.$60t# hld’ll.’ No appeal 0:: writ or error from raid judeimat VMS Q@rf#Ot#d.
"By lW#SOfl Of th8 fOr#~Oin~ f6Ot8 .;Pb Ql'O- oeadingr, Edgar ~88 prohibit& and pr#+#nt#d frm opercatln~ a614 well xO. 3 for 8 Q#rIOd 103 day8 froai January 22, 1937, to,Yey 6, 1937.
DurIq( said period the al&OUbl# pFo&OtiOIl a@- COP386 to said well by the Ql'OntiOn 8ChsdU10 and order of the mIBiUI@#~O~ -8 25 b.rl’@l* $*r day, aggregatlqg a total of 2,575 barr814, for 8uoh period which lCd$ar ~8s. 88 I tlnd8r@t*n~ th8 fOOt8, m#dy, xlllin& 8nd 8ble t0 pMdUO8, but
Bonorabla John 1E. Taylor, peea 4
an hemFnmbova pointad cut, was prsoantad sam by vlrka
?roa pn,dualng the pra- trar~~~naOove act forth. orsdingc "Sdgar MW m&a suthority from the Ooaalaalon tc produoa Ohi8 oil in euoh
da.ily qusntltlss and a~poants above the our- rant sllovmbla praduotlou aro&gn& to add ~611 by the praretlon ~6h6dules of the Com- miralon in sny amamr th6 Coaaiadon tbst asay l uthori66.
"Undar Lba raats haraiaobova eat roe& will you planer a&ire whaUhu not tha pro- duction of the amount of oil haraizmbova ~a- by the Crollllrrlan?” Monad iany, br pmalttrd
ltrppr6r8 that tha final dao%alon oi ~68 oourt the Srcn stated the Isots [88] in fotw 18ttar, that tha ~611 In qu66tlon vm6 16@61, and that tba par- atttar 6houl.d hsoa bean allond to produo@ the allew- 6bla uhioh war aralgnad to t&i6 wall under proxa- 8lon 8oh6dul66 Of tha Rail-d Cofad66ion of Taua for 8h4 z44di ~9x48 raid. The quartion, 8harafoxa, nsolv66 to ahJo6t the aUowa~la from rle6ioa hr tha authority it66u intO tjh4thhrr the [4] d4t434IPin: tl0n ad.m~a cop- this ~011 in preaczt8 and iotdta allouicrbla ohadulaa for tha Ea8t Taxer flald a6 to grant Sflgar *brok sllowablr”; in otbrr nuxde, to pm4f.t Edgar to lnorarra hi6 produotitn trim thlr *all ,neka up for tk uaount ot allowabla produotim whloh ka lost dudag tha tlm6 wkn hi6 w6llwa6 olo6ad do-.
Oanarally apesking, tba erithority of ehs R6il- road Oo~ieelon to promulg6t6 ruha relating to tha pro- duatlon or oil gs8 dap4nd8 upon the right or the mete or Taxsa and it6 eganolma to pravent the phfsioal waste of 011 and 866, l ithar andar~rouad or OVergxOUdl, mhioh ra aulte l ithar f?on lsmtilclsnt sethAs at prodno- tlon or produatdon in a%0668 ot aarkat Qalaund. Sac 603.4, 6023, 6029, 6042 end 60490, Bernonqs Anno- Artlolaa teted Tax68 Civil Statutar. Th6 Railroad Caactl6sfon t6 6p66lflcally given mthorlty to limit the 9IWduotion of %66ta is taking 91506, or $6 oil, ~bPr6 tt rind6 thst imr&lsCit,,* Utl34F tha ~XOVilliOiu Of 6Ootion 7 r#as~ably of- article 60~90.
J
Honorable J,:~hn B. Taylor, peea 5
The liialtstlon or the production rrom En 011 field n~~oaararlly carrier; with lt tha prcblam
of, dlvldin& tm allowable prcduotion among the vsrlour produoare in thu tie ld. The 6tatutaa Trxen prorid no ep4cifio rorraula ror tha dirtribution 0r the fmorr- 6bl4 produotlon, but mrroly provide in grnual tarma
that, "tha Comilselon shall dlatrlbuts, promtm, or otherwiea apportion or allocate tha sllow6bl6 produo- tlon amqc the varlouo prodnoara ou a rsaeonabla basis.* Artlcla 60~90, Saation 7. there hava barn go roportrd court dr-
while cirion6 on tha mbjaot, the quaetlon of thr authxltp R6ilmed COmmiaalon to permit en operator to produor "beak 6110wablaw h6s bean praviouely paaaad upon in opinions or this dspsrtmnt. In e lattrr
opinion dated May 27, 1935, to Senator Arthur P. Du(JP(an, by Han. Soott hinas, Attorney Firat A68i4~nt Gen4ra1, it was atatrd that thbr RaILroad COmta.la6lon doer not have authority to pemlt an operator to pro- duoa "beck ellowabla.* Th6 mama oonolu6lon we6 raaohad in an opinion by A66i.atant Attornay G6nar61 V. 3. (Diok) b$lt, sddrersrd to thr Railroad Co3mi66iOa of Taxas, dated Ncveabar 2C, 1935. Cop166 of these o9lnlons
ara attached hereto.
The Railroad Com618(lion ha6 sated upon thr conetructlon of it6 pmarf! by tha .Attornay Gansral'4 Deprtmnt, end hss oonsistently takan tha position that 1: do46 not have the suthoritf pamit 61n op- crater to !w!ka up by present hi6 fsilura to produotion It Is a inetter of Ron-
pm&co hia (LLlOPlBblil in thr peat.
are1 lznowledga~ thet at the! tim the o,pinions of thi6 da- perta*nt war4 written In 1933, varlow parson6 war4 aarart- REP th4 right t0 produc6 large cyentities 0r oil a4 "back sllwabla," and tke mrmlmCant dapartmantal oon- atrnctlon of the RailrO6d Coanl~~ion~s authority by thi8 dapartmnt and by the Railroad Oo~~lsslon ha6 directly Orfsotd important property rl@ifs.
In the reoa of thie aspart3cntsl construction, the Leginl5turr bee not aesn rit to 8aand the conasm- tlon statutes 210 08 to confer on the Railr 0rU CCmmi6Sl0n *6 ,
Honoreble John B. Taylor, p-8 6
the euthorltr to grant "beak allowable.* Section 7 6049~1, V~rnoa.1’8 Annotated Cirll of what is now Artlole wns aaondrtl by Chapter 76, Aotr L4th Legla- StatuteP, letun, gegular Sesrlcn, r!ratlon 6, atrsotirr April 13, 1935, anO that contained the mxe rorlslon8 a8 to the powers or the Railroad Coamirr P on to prorete thr produotlon of 011 a8 hereinbefore quoted. Dndrr Seotlon 20 of thla act, Its provl8loa8 teminet86 S8ptubw 1, 1937. Ry Chapter 15, Act8 1937, 45th Leg1618tur8, Bog- ular Se88lon, Se&ion 1, the l iio otlte term of thl8 aot was extended to septeaber 1, 1939, bl Hoc188 Bill 851, P,otm 46th Legislaturrr, Regular 888eion, 8eotIon 1, the 8rr80tiw tfim the sot war 8gain l xt8ndad, to srptenber 1, 19&l. Roth Of the88 Xt8B8iOB8 WeF8 rlth- Cut any asennOla8nt t0 the 8t8nitiry prOtiaiOn8 relating to the proration powar8 of the Railroad Commi88i0n.
Y;heP8 886tUtOr~ pmV181OIU al.8 $eB8r81 ti thrlr t8rm. the aapmllwnt81 oonstruotlon pb erd till b8 iollowd upon the rtatutr, ii reoaonable, by oourta. Th18 18 pertlonlarly tF\i8 where the OOB- structlon dimotlj arrrOt8 important proparty ri@ittr.
31 following the drparts8ntal cocn88ruCtion by th8 Rdhad caParf88iOn Of Eh8 OOB8emtiOB 8tatUt88 in another aonneotion, th8 8upnme Court raid In W&8 Of lie&nOlia PatlQl.rUB i?QaWBt VI. w8W hod888 Froductlon Co., 12?- ox. 617, 625, 104 s. w. ml-- n06 a
"iin eraainetion of our oonrarvatI0n etRtUt.8 dieOlOSca8 that they d0 SiOt In any manner directly deel'v?lth such quer- but are opsn to construction in re- tion, gard thereto. Under such a reoord n-8 think in thie Instenor wa should eU8tein the depmtmentel. ruling. ZOsubart v. Chloaeo, csto., iiy. Co., Texar bu, S. w. 10903 Moon&en v. Terrell, Comptroller, If,9 Tixar 173, 202 8. K. 7271 Tolleson v. ??og,an, Lend Conuolesloner, ':‘exa8 424, 73 8. %. 520.” *7 Eonorabl8 Jnhn B. Taylor, pa+?8 7
There Is additional reason for adopting ths ds;zzt%sntal o~netruotizn where, subeeguant to the Qerert7ental conatFUOtiOB, the Legia18turr has re-em&tad or nxtssded the e%tuta without char&o, th8 preeu~ptlon being that the Leqislsturr kn8W of tts Ee~9rtsantal csnstruotlon and wea eatl8flad with it. Federal Crude 011 Go. 18. Youat-La8 011 (<a) 56; Bt?Bh;n& 801 %k&yl:~. -g&et' lldSi'e:*, &7 ‘16 s #+ ~6 r-d Coaaisa& of Taxi8 re: T. &'N.'O. 2. CO.!
42 s. . d) refU8ed). (error ?c'~ en of the Opinion that f&hi8 depart!IWIb ehoulC a&here to ths construotion herstorom oolllris- tently follow86 by thle Urpartmaat and the Railroad and we therefore are cf opinion thet Conmisaim, the Rallrorad Colr~laslon fims na have authority to parmlt a?car tc produos thr "baok ellowable~ xhlah h8 %?6,8 FrsV8Zlt8b trOn p1.0 uOiB@ ttB68r tha trot8 8tat8d in your letter.
Yours very truly Jama8 F. R8rt k88i6tbnt APPROVEDOCT 3, 1940
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